Perhaps the most astonishing thing about Ra Pharmaceuticals' (NASDAQ:RARX) phase II study of RA101495 for the rare disease paroxysmal nocturnal hemoglobinuria is that the company was able to find three subjects who had not already received Alexion's (NASDAQ:ALXN) Soliris.
Whatever boardroom troubles Alexion is going through, it cannot be denied that in Soliris it has a stranglehold on this market, and Ra's 20% share price fall yesterday suggests that its investors realize this too. Akari (NASDAQ:AKTX), another group targeting this therapy area, recently had a setback of its own that led to the departure of its chief executive.
Soliris, like RA101495 and Akari's Coversin, work by targeting complement factor C5. Paroxysmal nocturnal hemoglobinuria (PNH) is a life-threatening disease in which red blood cells are destroyed by the complement system, and the incidence is extremely rare, with just one or two cases per million.
The problem for anyone trying to compete is that, since launching Soliris in 2003, Alexion has aggressively pursued PNH patients to get them onto its drug. And well it might: at a price of up to $600,000 per patient per year in the US, Soliris is one of the most expensive treatments in all biopharma.
Little wonder that others want a piece of the action. So far, however, Ra has not managed to persuade many of its ability to compete.
The phase II study of RA101495 yesterday yielded data on two of the three subjects, showing reductions in LDH, an enzyme present in abnormally high concentrations in PNH, to 1.6x the upper limit of normal, with no safety concerns. One worry was that PNH recurred in one subject, though this was said to be a transient episode.
The trouble for Ra is that this level of activity seems to be broadly in line with Soliris, so the only possible advantage is RA101495's self-administered subcutaneous delivery, versus Soliris' intravenous route. Apparently patients failing on Soliris will in future also be enrolled into this trial.
Of course any competitor could also gain an edge on pricing, with much room to move below Soliris's price tag - should any reach the market.
However, against all this is ranged the full might of Alexion's sales and marketing effort, in addition to the group's own attempt to develop ALXN1210, a Soliris follow-on with eight-weekly dosing. Unusually for a rare disease company, Alexion is notorious for employing a vast sales force that interacts constantly with the PNH community and encourages doctors to test for the condition.
It is partly this that got it into difficulties recently, when the group came under fire for aggressive sales practices. Its former chief executive David Hallal left the company in December amid a sales fraud investigation.
The PNH area also claimed the scalp of the chief executive of Akari, Gur Roshwalb, who resigned after an inaccurate report by analysts at Edison turned out to have been approved by him. This report claimed that Akari's Coversin had matched Soliris in phase II, on the basis that four of five subjects had shown LDH reductions to below 1.8x the upper limit of normal.
Other companies working on treatments for PNH include Alnylam (NASDAQ:ALNY) - using an mRNA approach to hit complement factor C5 - Novartis (NYSE:NVS), Roche (OTCQX:RHHBY) and Achillion (NASDAQ:ACHN). The big pharma groups must be seen by the likes of Ra and Akari as posing formidable future competition, but for now the primary barrier to entry is Alexion.
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